Top story

Aldi is to invest £300m in enhancing its UK stores after posting annual sales of £7.7bn in the year to 31 December 2015.

Sales for the year rose £812m (11.8%) as customer numbers increased by 761,000 thousand to 13.9 million.

The sales performance means Aldi has doubled revenues in just three years, after recording sales of £3.9bn in 2012.

However, operating profits fell 1.8% to £255.6m during the year, which Aldi said reflected its continued investment in price as it cut prices on 30% of its products.

Meawhile, Aldi also announced a “landmark” investment programme in its UK store estate over the next three years.

Aldi will refurbish over 100 stores in 2017, with the new format including newly-designed fixtures for beers, wines and spirits, fresh produce and baby and toddler, as well as a new food-to-go fixture.

Each store will also see a significant increase in chill space, while other improvements include new in-store colours to signpost categories, signage focusing on quality, range and provenance, and product-specific lighting.

Aldi added that its plans to open 1,000 UK stores by 2022 on track with 70 new sites scheduled for 2017.

Matthew Barnes, CEO of Aldi UK and Ireland, said: “Aldi has continued to win the trust of millions of new customers thanks to a single, simple and unbroken promise – to provide the very best quality products at prices that cannot be beaten. This explains our performance and underpins our investment.

“We’re doing what I have always said we would do – investing our margin to maintain a significant price advantage over our competitors, keeping Aldi the lowest-price supermarket in Britain with outstanding quality products.

Last year, the business invested £536.2m of capital expenditure in opening new stores and improving its distribution network in the UK and Ireland. The supermarket said its future capital expenditure plans are unaffected by the UK’s decision to leave the EU.

Barnes added: “During the past five years we have invested close to £1.7bn in the UK by opening more stores than any other supermarket and enhancing our distribution capabilities. Our future capital expenditure plans are unchanged – we will continue to make significant investments in our business - paying our employees more than any other supermarket, treating our suppliers fairly and delighting our customers daily with outstanding quality products at unbeatable prices.”

Morning update

Aldi apart, it’s a quiet start to the week with no other news of note on the markets this morning.

The FTSE 100 has opened down sharply this morning, dropping 1.3% to 6,821.5pts.

The supermarkets have started the week poorly after weekend papers highlighted worries over Tesco’s pensions fund. Sainsbury’s (SBRY) is down 1.8% to 249.4p, Tesco (TSCO) is down 1.2% to 179.3p and Morrisons (MRW) is down 1% to 216.2p. Marks & Spencer is 1.9% down to 314.7p.

Other notable fallers include Real Good Food (RGD), down 5.8% to 41p, Hotel Chocolat (HOTC) down 5.4% to 227p and C&C Group (CCR) down 4.3% to €3.68.

Early risers include Science in Sport (SIS), up 6.7% to 74.2p and PureCircle (PURE) up 1.7% to 304p.

This week in the City

A busy week this week moves into gear tomorrow morning with a quarterly trading statement from Sainsbury’s (SBRY) – its first update since the completion of its deal to by Argos/Home Retail.

Additionally, tomorrow morning brings half year results from AG Barr (BAG), a trading statement from PZ Cussons (PZC) ahead of its AGM.

On Wednesday SABMiller (SAB) shareholders will meet for the crucial vote to decide the future of its £79bn tie-up with AB InBev (ABI). ABI shareholders are also meeting, but all attention will be on SAB shareholders after a number of investors protested at the terms of the deal.

Wednesday also brings a pre-close trading update from Imperial Brands (IMB), while in the US PepsiCo will issues its third quarter earnings.

In economic news the monthly CBI Distributive Trades survey is out on Tuesday, while the GFK Consumer Confidence survey for September is out first thing on Friday.